Analyst Concall
Shriram Fin skeptical on Apr-Jun, aims 18% AUM growth FY27
This story was originally published at 21:54 IST on 24 April 2026
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--Shriram Fin: Apr-Jun the most difficult quarter to predict
--Shriram Fin: Expect gold loans to grow more than 30% in FY27
--Shriram Fin: See more than 20% growth in passenger vehicles FY27
--Shriram Fin: Budgeted for 8.5% NIM for FY27
--Shriram Fin: Would like to protect NIM at current level
--Shriram Fin: Will only borrow funds after 4-5 months due to ample liquidity
--Shriram Fin: Not in hurry to raise funds as of now
--Shriram Fin: Expect some people from MUFG Bank to join in executive roles
--Shriram Fin: Too soon to gauge impact of West Asia war on credit cost
--Shriram Fin: Operating expenses to remain at FY26 level in FY27
--Shriram Fin: Cautiously reduced growth in MSME loans
--Shriram Fin: Expect AUM to grow at 18% in FY27
--Shriram Fin: Aim to sustain FY26 growth number in FY27
--Shriram Fin: Tractor sales may be hit by below-normal monsoon expectations
--Shriram Fin: Expect demand for new vehicles to remain muted FY27
--CONTEXT: Shriram Finance mgmt's comments in post-earnings analyst concall
--Shriram Fin: GST cut gave boost to new vehicle sales in Jan-Mar
By Kabir Sharma and Shumaila Firoz
MUMBAI – Shriram Finance Ltd.'s management cautioned that the June quarter will be the "most difficult to predict," citing evolving macroeconomic conditions, even as the company outlined steady growth ambitions and a cautious operating stance for 2026-27 (Apr-Mar).
Speaking during a post-earnings analyst call on Friday following results for the March quarter and FY26, the company said visibility remains limited in the near term due to uncertainties around monsoon trends, fuel prices and geopolitical developments, particularly the ongoing West Asia conflict.
Despite the near-term ambiguity, the lender has targeted assets under management growth of around 18% for FY27 and aims to sustain the momentum seen in FY26. The management indicated that it would revisit these projections after the June quarter once there is greater clarity on external conditions.
On profitability, the company has conservatively budgeted net interest margins at around 8.5% for FY27, while reiterating its intent to protect margins at current levels. The management said any benefit from lower cost of funds would be selectively passed on to customers to support growth while retaining profitability.
Shriram Finance also highlighted strong liquidity on its balance sheet, and said it is not in a hurry to raise funds. The company expects to tap borrowing markets only after four to five months.
The company expects divergent trends across segments in FY27. Gold loans are projected to grow over 30%, driven by a relatively smaller base and strong demand. Passenger vehicle financing is also expected to expand more than 20% in FY27. However, THE management struck a cautious note on broader vehicle demand, stating that new vehicle demand is likely to remain muted in FY27 after a strong Jan–Mar that was supported by goods and services tax cuts.
Rural-linked segments may face pressure, with tractor sales likely to be impacted by expectations of a below-normal monsoon. At the same time, the company expects used vehicle financing demand to remain resilient. In the micro, small, and medium enterprises segment, Shriram Finance said it has deliberately moderated growth and will remain cautious amid external uncertainties such as global trade disruptions and geopolitical risks.
Operating expenses are expected to remain broadly in line with FY26 levels, with the company maintaining a cost-to-income ratio in the 26–27% range over the medium term, it said.
On asset quality, the management said it is too early to assess the impact of the West Asia conflict on credit costs, noting that any stress will likely emerge with a lag and depend on broader economic activity and fuel price movements.
Following the recent stake sale to Japan's MUFG Bank, the company indicated that some personnel from the Japanese lender are expected to join in executive roles, although no major changes in senior management are currently planned.
Beating Street estimates, the company posted a net profit of INR 30.14 billion for the March quarter, up 41% on year and 20% on quarter. After the quarterly earnings announcement, shares of the non-banking finance company rose over 2% at INR 1,030 on the National Stock Exchange, but eventually ended the session broadly flat at INR 1011.30. End
Edited by Tanima Banerjee
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